The First Crack: $270 Billion In Student Loans Are At Least 30 Days Delinquent

Back in late 2006 and early 2007 a few (soon to be very rich) people were warning anyone who cared to listen, about what cracks in the subprime facade meant for the housing sector and the credit bubble in general. They were largely ignored as none other than the Fed chairman promised that all is fine (see here). A few months later New Century collapsed and the rest is history: tens of trillions later we are still picking up the pieces and housing continues to collapse. Yet one bubble which the Federal Government managed to blow in the meantime to staggering proportions in virtually no time, for no other reason than to give the impression of consumer releveraging, was the student debt bubble, which at last check just surpassed $1 trillion, and is growing at $40-50 billion each month. However, just like subprime, the first cracks have now appeared. In a report set to convince borrowers that Student Loan ABS are still safe - of course they are - they are backed by all taxpayers after all in the form of the Family Federal Education Program - Fitch discloses something rather troubling, namely that of the $1 trillion + in student debt outstanding, "as many as 27% of all student loan borrowers are more than 30 days past due." In other words at least $270 billion in student loans are no longer current (extrapolating the delinquency rate into the total loans outstanding). That this is happening with interest rates at record lows is quite stunning and a loud wake up call that it is not rates that determine affordability and sustainability: it is general economic conditions, deplorable as they may be, which have made the popping of the student loan bubble inevitable. It also means that if the rise in interest rate continues, then the student loan bubble will pop that much faster, and bring another $1 trillion in unintended consequences on the shoulders of the US taxpayer who once again will be left footing the bill.

Fitch believes most student loan asset-backed securities (ABS) transactions remain well protected due to the government guarantee on Family Federal Education Program (FFELP) loans. The Federal Reserve Bank of New York recently reported that as many as 27% of all student loan borrowers are more than 30 days past due. Recent estimates mark outstanding student loans at $900 billion- $1 trillion. Fitch believes that the recent increase in past-due and defaulted student loans presents a risk to investors in private student loan ABS, but not those in ABS trusts backed by FFELP loans.

Why is the bubble starting to pop now?

Several macroeconomic factors are putting pressure on student loan borrowers. The main ones are unemployment and underemployment. The Bureau of Labor Statistics estimates the current unemployment rate for people 20 to 24 years old at nearly 14% and for those 25 to 34 years old, 8.7%. Underemployment is difficult to measure for these demographics, but it is likely having a negative impact.

A month ago, Zero Hedge readers were stunned to learn that unemployment among Europe's young adults has exploded as a result of the European financial crisis, and peaking anywhere between 46% in the case of Greece all they way to 51% for Spain. Which makes us wonder what the reaction will be to the discovery that when it comes to young adults 18-24) in the US, the employment rate is just barely above half, or 54%, which just happens to be the lowest in 64 years, and 7% worse than when Obama took office promising a whole lot of change 3 years ago.

And while technically this means 46% are unemployed, or the same percentage as in Greece, the US ratio, which comes from Pew, shows the ratio as a % of the total population: a very sensitive topic now that every month we see another 250,000 drop off mysteriously from the total labor force. However, unlike those on the trailing age end, young adults by definition are the labor force in their age group demographic, so it would be difficult to explain away this horrendous number by claiming that ever more 24 year olds are retiring. Although, yes, we agree that some may be dropping out of the labor force in order to go to college, incidentally the locus of the latest credit bubble, where they meet a fate worse even than secular unemployment: they become debt slaves of the Federal System, with non-dischargable debt at that, which even assuming they can get a job would take ages to pay back!

But wait: there's more - of all age groups, this is the one that has actually seen its wages drop the most under the Obama administration.

So not only are they unemployed, young adults are at least poor.

Net result: double the change, zero the hope.

But fear not dear banks: taxpayers got your back, as usual.

However, we believe that ABS trusts backed by FFELP loans are unlikely to be affected by employment trends, as they are at least 97% backed by the federal government. In addition, recent securitizations have been structured more robustly and many have backup servicing agreements.

Even so, Fich is covering its bases nonetheless:

While FFELP loans are largely protected from these trends, private student loan ABS trusts, especially those that were structured aggressively and with less stringent credit standards before the recession, are expected to continue experiencing high defaults and ratings pressure. Fitch will continue to monitor these political and macroeconomic factors as they evolve and will determine any impact they may have on ABS trusts.

And as a courtesy reminder to our young up and coming "thinkers", this is $270 billion in debt that can not be discharged. Go ahead - file for bankruptcy - see what happens.

The question then is - what is the student loan version of the ABX trade. After all if Bernanke is willing to blow another bubble, someone has to be able to profit when this latest soon to be failed attempt at central planning.

The average outstanding student loan balance per borrower is $23,300. Again, there is substantial heterogeneity in balances of individual borrowers. The median balance of $12,800 is roughly half the average level, which indicates that a small fraction of people have balances significantly higher than the median. About one-quarter of borrowers owe more than $28,000; about 10 percent of borrowers owe more than $54,000. The proportion of borrowers who owe more than $100,000 is 3.1 percent, and 0.45 percent of borrowers, or 167,000 people, owe more than $200,000. The distribution also varies by age group: for example, borrowers between the ages of thirty and thirty-nine have the highest average outstanding student loan balance, at $28,500, followed by borrowers between the ages of forty and forty-nine, whose average outstanding balance is $26,000 (see chart below).

How much difficulty are borrowers having paying back their debts? Of the 37 million borrowers who have outstanding student loan balances as of third-quarter 2011, 14.4 percent, or about 5.4 million borrowers, have at least one past due student loan account. Together, these past due balances sum to $85 billion, or roughly 10 percent of the total outstanding student loan balance. To put this in perspective, the same 10 percent rate applies on average to other types of household delinquent debt, including mortgages, credit cards, and auto loans. Does this mean that the prospects for student loan delinquencies are similar to those for the household debt in general, and thus no special attention is warranted? (See chart below.)

Unfortunately, this is not the case—some special accounting used for student loans, not applicable to other types of consumer debt, makes it likely that the delinquency rates for student loans are understated. In the case of federally backed loans, which represent a majority of total lending, repayment is deferred until the student graduates from school and can then be pushed back by another six-month grace period. How do these student loans in deferment or grace periods show up on credit reports and contribute to the delinquency statistics? Given that no payment is necessary until graduation, these deferred student loans are not included in the past due balance but they are included in the total balance from which the delinquency rate is derived. This may help explain the low proportion (12.6 percent) of borrowers with past due student loans among those under thirty years old, compared with 16.9 percent among those between the ages of thirty and thirty-nine, since many of the younger borrowers are still in school and don’t yet have to make any payments.

To address this potential bias in calculating delinquency statistics, we exclude individuals who appear to be temporarily exempt from making payments because they are in school or newly graduated from school. These are students who, as of third-quarter 2011, owed as much as or more than they did in the previous quarter while maintaining a zero past due balance. We will be able to make our inference more precise when loan-level panel data are available, but this is our first-cut analysis given the available data. We warn that there is room for misclassification in this analysis. For example, there could be borrowers who are subject to the income-based repayment plan whose payment fell short of the accrued interest, resulting in a balance that increased. Recall that this exercise looks at the student loan borrowers who have a balance as of third-quarter 2011; therefore, those who had taken out a loan at one point but paid it off before third-quarter 2011 are not accounted for.

From this exercise, we find that as many as 47 percent of student loan borrowers appear to be in deferral or forbearance periods, and thus did not have to make payments as of third-quarter 2011. Specifically, 17.6 percent of borrowers had exactly the same balance in the third quarter as in the second quarter of this year, and 29.1 percent increased their overall student loan balance by taking on new originations or accruing interest to the balance.

We then recalculate the proportion of borrowers with a past due balance excluding this group of borrowers. We find that 27 percent of the borrowers have past due balances, while the adjusted proportion of outstanding student loan balances that is delinquent is 21 percent—much higher than the unadjusted rates of 14.4 percent and 10 percent, respectively (see charts below).

In sum, student loan debt is not just a concern for the young. Parents and the federal government shoulder a substantial part of the postsecondary education bill. Moreover, the student loan delinquency picture is not fully captured in the broad statistics since a significant proportion of borrowers and balances are not yet in the repayment cycle. The implications of this last fact for future changes in the student loan delinquency rate are a very important area of research.

Given that student loans are an indispensable tool for educational advancement, this form of debt will remain a critical policy focus for generations to come. Going forward, we will continue to monitor the student loan market with new data each quarter, and we will try to provide useful information on the landscape of student debt.

Gully: that influx of hookers has already happened a long time ago -- it's just that their good work hasn't been reflected in official employment data -- and let me tell you the whores are whoring extra hard because no one save for the banksters can afford their services; ergo, the rate of whores is exponential to the mildly declining rate of banksters and politicians and other scum. That doesn't bode well for big pharma since VD meds are not growth industry as of late, while S&M paraphenilia is on the slight uptick.

I remember cheerleading the collapse of New Century Financial and the housing bubble bust. It was awesome watching the carnage, and still is. We recommended everyone stop paying their mortgages at the time, as it was the right thing to do. We now recommend All students with student loan debt stop paying their loans on worthless educations, as the government can't get all of them, and it will make for great TV viewing.

Uni-Verse-ity. Everyone comes out singing the same song. It's like getting in debt for your own servitude.

My college loans chased me over the years of my living large with largesse right through my lean and hungry ones, steadily showing no reduction in principle, always more more more.... crazy. i bit ze bullet and pre-paid it all 4 years ago. In rupees. Pinched but the freedom received has been epic!

It's a moot point. Even if the Feds ended up footing a one trillion dollar + direct loss on these loans, the losses will seem trivial compared to the contraction in the for-profit and private not-for-profit education sector. When the subsidized student loan gravy train inevitably ends, you could very well see a majority of for-profit colleges close, a third of all law schools, end of alot of the more niche post-graduate programs, major contractions in student enrollment in undergraduate colleges across the country, etc. By that point, we'll be near QE 4 or QE 5 and the idea that these loans COULD ever have been paid back will be absurd on its face.

And just wait. In two years we'll be bailing out the educational institutions to "save" them.

America just refuses to accept any form of business cycle. Things can expand, but they can never be allowed to contract.

One minute we're making too many houses, the next minute we're bailing out the builders. One minute we're making too many cars, the next minute we're bailing out the automakers. And one minute we're spending too much on education... and next year we'll be "rescuing" schools from their own largesse.

The moral of the story is always the same: Spend wildly beyond any responsibility (preferably using government aid), and then when your game falls to pieces (as it must), raise your hands to the government and cry out to be saved.

Unlike mortgages (which you could walk away from or discharge in bankruptcy), student loans are like herpes, they are with you forever. These kids can run, but they can't hide. Only death will discharge student loan debt (or some "public service" jobs).

Exactly why student loans should have a lower interest rate than most all other consumer credit. It has the least risk. Think about it, what has more risk? A 30 year mortgage or a 20 year studen loan? Yet, our government loans to students at an incredible 6.8%, and banks at 0.00% and homeowners at ~4%. Ridiculous! We punish those wishing to make the country more competitive through higher education (yes, I know the education system sucks and provides miserable skills, but that is not the point) essentially forcing them into modern day serfdom. Oh wait, maybe we should be using awesome 529 plans and give our money to the markets to grow so we don't have this predicament....sure.

This is criminal - SL loans should be pegged or floated against the fed rate, maybe 200 bps higher at all time. This country sure has it's priorities all f*ed up!

This would be a tremendous suggestion but for the fact that the student loans aren't for students... they're for a bloated educational infrastructure... in short, it is my suggestion we do not give loans of any sort for this type of endeavor... unless there is some incredibly strenuous merit based methodology... and even then it should be at a "real" market rate... not any discount. What you're suggesting simply helps the FED blow its bubbles (all it's good for).

And if the department (art history? womyn's studies?) can't afford scholarships that will cover all the costs, maybe the student will have to kick in their OWN money, or forget about art history at 20 years old, go to work for awhile. Leave the art history until they can afford it, in their 40s....

I can't think of a situation where a student loan should ("should") ever be necessary. If they aren't competitive enough for a full scholarship, and/or the department isn't competitive enough to offer that, then let the students pay for their own classes. And if the school wants a full class complement, let them charge accordingly.

Off topic. But since you bought up herpes. It is curable, just like every other disease, virus or infection. During breakouts dose sore with H2O2 3 times a day. You can do the purge to bring out the offset. found at http://drinkh2o2.com/ This is highly scorned treatment as it works and costs almost nothing. Plus you will have to think and take command for yourself and be your own doctor / scientist following the scientific method and using deductive reasoning. If you are a triathlete or Olympian then you know about it a little bit, the Russians always use it. It's runners high in a bottle.

Times have never been worse for pimps. Declining rich-boy clients, increasing overhead (or underhead in this case). Plus all those pimpy web-based dating sites are just eating their lunch....yet another formerly recession-proof industry hit hard

indeed, the hooker index is trending in new directions, best to update your memes if you're going to trade this.

with the uptake in womenz "taking all teh jobz" the menz are pushing for equal job security, and are taking to the streets - and with the rise in porn usage, which promotes BJs and anal, men have realised their equal opportunity - everyone has a mouth and an ass! - and are now cornering the market as sex providers, thereby increasing their cultural worth again.

the good news is birth control won't be necessary in the future, as butt-babies are notoriously difficult to conceive, so no arguments as to who pays for what in "health care" and no life sanctity constitutional amendments are needed - win win folks!! every body is happy!!

I don't post much but this topic hits to close to home for me... i graduted in 20010 with a modest 40000 in student loan debt allow me to transport myself in time back to 2006 when i was a young buck whith the world by its balls. I got accepted to a school that i could not afford but got an athlectic schoolship to cover 75% of the tuition, life was fucking good for about 2 years untill my jr year when realized that i couldnt make rent wih out getting a job. and it was then when i disovered zerohedge and realised just how out of whack the cost of eduation was..... high school teachers force college on their sudents there are incentives in place for teachers to get kids into college wethere they should be there or not..and kids who are 18 years old cant drink but can indenture thmselves to hundreds of thouseounds of dollars in student loan debt is crazy they can't drink a beer but can take on so much debt is nuts.. and to top it off the debt cant be dischraged in court..SHIT IS OUT OF WHACK... in 1975 my uncle went to mit for 4 years for less then 15grand what the fuck?

haha good guess.. no i did not major in english althouth i wish i did because grammer is a dying thing ( you can thank 70 years of public education for that) when people are giving things for free like a public education the results speak for themeselves, however incohenrently and grammatically incorrect they may be you all still paid for it haha..

That worries officials like Terry Traynor, assistant director of the North Dakota Association of Counties.

"I'm fearful that it has a possibility of passing," Traynor said. " The proponents have a very attractive message to sell: Do you like property taxes? If you don't, vote for this and they go away."

North Dakota counties get about 60 percent of their revenue from property tax, Traynor said. According to a ND Tax Commissioners report, cities and schools also depend heavily on property tax collections. Schools levied $331 million in 2010, counties $219 million and cities $113 million.

If that revenue disappears, the effects would be dramatic, Traynor said.

"Jan. 1 of 2013 every local government in the state of North Dakota will go bankrupt," he said. "We'll have to stop plowing snow and teaching kids, because there just won't be any money after that."

In the north central North Dakota small town of Carrington, population 2065, Mayor Don Frye wonders if businesses will build in his city if the snow isn't plowed, or the sewers don't work.

[/quote]

Backers of the measure say there's plenty of revenue to go around without property taxes. But local government officials say eliminating property tax would create chaos.

North Dakotia property taxes - Schools levied $331 million in 2010, counties $219 million and cities $113 million??? Huh? The population is incredibly small. These are big numbers for a state that probably has population less than 1 million.

Looks like the greedy state and local bureaucrats are greedy and evil - everywhere. ND is swimming in nat gas, shale oil/gas. The freaking Saudi Arabia of the badlands.

I used to think owning property was worthwhile. Why? You are a slave tto paying property taxes. You don;t own shit - the county owns it with the bank.

But local government officials say eliminating property tax would create chaos.

"In the north central North Dakota small town of Carrington, population 2065, Mayor Don Frye wonders if businesses will build in his city if the snow isn't plowed, or the sewers don't work."

The town was founded in 1883 when the railroad pushed through the area.

So.... How, or why, did businesses settle there in the first place before there even was electricity, paved roads, and sewers?

How did schools get built in 1883, or roads, and how did snow get removed then?

Looking over the population records of the city, its current population is nearly what it was in 1950. Thus, it is very disingenuous to say that business will not locate there due to property taxes won't provide for sewers or snow plowing.

For all of you who think all college students are economic idiots (most are), here is my story. I have three degrees from two different universities. All useful engineering degrees (not lesbian degrees) and I have zero in debt. The entire BS cost $35,000 lock stock and barrel. My folks had no problem helping me pay the bills. My graduate degrees, zero $. I paid off my wife's loans recently. This means we have NO studnet loan debt. You can graduate with good degrees if smart. Go to a good public university and earn a good degree.

Going to Ivy league/private universities is just stupid. Earning a liberal arts degree is stupid. Pure indoctrination. These kids should suffer for being stupid.

Private universities may not be stupid in all cases. My state colleges offered me loans for part of my tuition. The private liberal arts university I attended gave me a full ride. Double major and a minor in 4 years and no debt for the BA, and paid for my MS 10 years later as I went. Liberal arts may not be as immediately/obviously useful as hard sciences, but I've started a consultancy and another business that were both in the black from the beginning and are still going strong; my undergraduate education helped with that.

Payment amount for an academic year varies between 700 and 1690 Euro, depending on the specialty, the form of study and the language of teaching. Every foreigner at the time of registration, have to pay the tuition fee for at least one academic year. From the second year of study, payment can be accepted in installments during the academic year.

+1 same question. How do we make money here? There has to be something better than shorting SLM. The problem with student loans as opposed to mortgages is that you cant erase the debt right? It stays with you forever if you dont pay it, always tarnishing your credit report unlike other debt that can only be reported for so long.

How so exactly? First, in our biflationary environment, WAGES ARE STAGNATING OR DECLINING... so, that wheelbarrow full of money is going to come from where?

Second, this debt is not extinguishable and may very well be with a governmental creditor... if you think that there will not be a conversion into another currency or some other type of rule attempted to be implemented, you're crazy...

I'm right, I've researched it. And I'm not dreaming. When the currency dies, the debts are inflated away. They won't be "convertable" or worth the effort. The other possibility to keep calling it the dollar and return to a true metal standard will require a reset of debts (and asset values). A full reset, not a partial one.

What the fuck have you researched where the world's reserve currency died AND the world's police force and most entrenched control group just gave up?

In the end, you need a mechanism to get the dead currency into the hands of the debtors... my question is pretty simple... what is this mechanism? At present, the only people getting the spoils are the principal actors in the fraud... and their more direct enablers. Further, there is no telling how long it would actually take for the money to be printed AND flow into debtors' hands, but I'm thinking it literally might not even be possible to print that much money (at present denominations for sure). It would take a manhattan project.

You're arguing from induction without reference to why the general rule works in this particular situation... this is not only incredibly lazy, but it requires the rest of us to guess. I'm not in the business of guessing, nor making peoples' arguments for them.

And yes, we can agree that a contract is written in a particular currency (generally). And that to change the contractual currency, after the fact (given the death of the contract currency), would be a breach and/or ineffective, barring mutual consent. However, this does not change the fact that there are swaths of people who the rules get changed for at the drop of a hat and always to their detriment... nor that you have not connected the dots between generic demand pull inflation and our present enigma.

We are one bond market panic/cascade bank failure away from needing to print trillions (at least 5 trillion in bank deposits exist - FDIC numbers) of depositors dollars as people demand their money (most of it is electronic and does not exist except in a computer right now - which is why when you need say 10K in cash they have to "order it".). Voila, instant hyperinflation as the FED goes into physical print mode.

I don't think most people understand how Ben and the politicans are playing with fire and will eventually get burned. And the FED will have no choice but to print or face pitchforks so to speak.

Of course, there is a chance that the "wipeout" will be allowed and no printing to avoid hyperinflation. In this case, everyone goes broke and the currency (and debt collection) are effectively dead. We reboot with a new currency, in the interim I would again suggest hoarding Silver coins because this is an instant restart and you are protected in either case.

A debt that you can't pay and can't discharge would seem to == lots of people owned outright by the government. Look for a scheme to trade work for debt discharge coming to a a federal government near you soon. Need some warm bodies to fill an arena for a speech? No problem we have em. Need a mob to take out that pesky right wing competotor? We can handle that too.

There's more to it than simply a debt that can't be discharged. I think this was setup from the beginng as a recruiting tool for some as yet unknown organization.

This is a good time to buy long dated puts or leaps since the Vix is so low. But, I don't think the student loan bubble bursts until next year or possibly even later; the reason being that the govt methodology doesn't account for many of the actual defaults, students can defer for 3 years, etc. It's more complex than you'd think and can be dragged out. So, research everything and try to short at the right time.

But we're nearing the point where there's no money (with value) for bailouts. The "middle class" is poor, so who is going to pay? The rich won't. So that leaves the printer, and hyperinflated dollars. Seems like a good short. The timing is the only question.

They took a major beating back around April 2010. The catalyst was a young woman who went to one of the ones (Art Institute) owned mainly by Goldman Sachs. She was told she would make $80,000 a year designing video games. She graduated with over $70,000 in debt. She ended being a stripper in Cocoa Beach to pay back her loans. She sued and it actually caused them all to tumble back in April 2010. The majority of those scchols tanked at the time. Some have not recovered. She sure kciked the hell out of their market cap for the whole industry.

The ship was the pride of the American side
coming back from some mill in Wisconsin.
As the big freighters go, it was bigger than most
with a crew and good captain well seasoned,
concluding some terms with a couple of steel firms
when they left fully loaded for Cleveland.
And later that night when the ship's bell rang,
could it be the north wind they'd been feelin'?
The wind in the wires made a tattle-tale sound
and a wave broke over the railing.
And ev'ry man knew, as the captain did too
'twas the witch of November come stealin'.
The dawn came late and the breakfast had to wait
when the Gales of November came slashin'.
When afternoon came it was freezin' rain
in the face of a hurricane west wind.

I hate to say it but Zerohedge is definitely turning into Chicken Little reading.

Go back an look at what currently populates the front page! Nothing but scare mongering! I mean does anybody expect student loans to be current? So what? They can't even shake them loose in bankruptcy! So freaking what?

Tyler, you should just come out and say it. It's good for healing. "I missed the huge freaking rally because i was skeered".

As you well know, you have to be right about content and timing too. You are right about what's ailing this economy, and you are not unique in this, but your timing stinks so YOU LOSE. AND you are starting to get a reputation for being only about page views. So you have a fork in the road. Choose carefully.

Yes, when people are under the assumtion they are entitled to a college education; shit is actually falling apart.

Like in Greece:

Greek students pay no tuition, a fact enshrined in the constitution, so there’s no incentive to leave college, said Alan Ruby, a senior fellow for international education at the University of Pennsylvania in Philadelphia.

Here many mediocre students are pushed into college when the degrees they compete for offer no possibility for employment except for crap like community organizing..thereby creating exponential destruction and deficit should they be chosen to be the puppet...ahh President.

You are in the wrong place. This site is not about market trends. Its about truth, and usury, and unpunished criminals, and actual source provided information.

Someone like you wont care, as you dont care how filthy your money or how bloody, but I will never put one dime back in the so called markets; at least this side of collapse or revolution. You may be interested to know though that I, and alot of people like me, are considering careers in taking shit from people like you; you are trading with our enemy afterall.

In closing, fuck you, crawl back in whatever hole you came out of. See you, and people like you, around...

I agree with you in general but would add this site is a great aid for cynical investing. Tyler supplies information, how you use it is up to you. I've done well and I read this site regularly.

And fact remains, with exponential population increase - billions of people fighting over the same resources - if you have access to capital long this is a perpetual bull market, just invest in the basics.

I would suggest that discerning the fundamentals is easy. Timing is really, really hard. I don't invest based on what I read on ZH, but the information I gather here adds to that I get from other sources to develop my overall world view when it comes to investing.

They only "missed the rally" if they already cashed in and sold all their stocks. Otherwise, just check out what happened in this week's Apple flash crash: it was a warning that when the selling starts it's already too late to get out. May 2010 and September 2008 already proved that

Yes, well said crab cake. Student Loan information is valuable to me. It has always bothered me, and the lies and deceit corrupts all levels of society. I want to crush the bones of every loan officer, dean and politician that has supported this abomination, enough to stop them and remember into their next lifetime.

Back to the heartless souless bitch. If you just want money that bad and you don't care where it comes from or what kind of dirt bag, just take it. If you don't have protection, run the money through one of Bush's slushfund accounts (or who ever is around you that looks like Romney, account numbers easy to get) and leave more money in the account then you took. This trick works forever.

In other news I just got back from Greek Independence Day celebration's from when they fought the Turk's and saved the world. Thank you Mr. Panos.

That's the spirit. There are plenty of others out there thinking exactly the same. The time is near.

War is an ugly thing, but not the ugliest of things. The decayed and degraded state of moral and patriotic feeling which thinks that nothing is worth war is much worse. The person who has nothing for which he is willing to fight, nothing which is more important than his own personal safety, is a miserable creature and has no chance of being free unless made and kept so by the exertions of better men than himself. - John Stuart Mill

OOOOOOhhhhh you gonna be burnin' youself alive? You want press, you'd better load up the AK and get some trigger time in in this country. Say, pal, lets look at a man you never hear of...who burned himself to death. OOOOOh bummer, he was white and be protesin' an stuff about...well who knows? Wat's on da TV?

A former Jaffrey man who committed suicide Wednesday by setting himself on fire in front the Cheshire County Superior Courthouse explained his actions in a rambling letter to at least two newspapers.

“A man walks up to the main door of the Keene N.H. County Courthouse, douses himself with gasoline and lights a match. And everyone wants to know why,” wrote Thomas James Ball, 58, of Holden, Mass.

His letter, more than 10,000 words long, was received in the mail by the New Hampshire Union Leader.

Ball ended his life in front of the courthouse where two thick files trace the disintegration of his marriage. The files include reports of slaps on the face of a preschooler. An arrest. A subsequent divorce. Visitation disputes. Orders to pay child support. A pending contempt charge.

I don't care if on average I find 1 out 5 posts to ZH interesting to me personally, and of those, assuming predictions are made, there's another 1 in 5 chance perhaps that they're "right" in the sense of things happening as described; that's not what I'm here for, nor do I think it's what others are here for ... it's to get a different look at things, to read about things I might not elsewhere, and to sod through the comments section for the occasional nuggets, which are highly worthwhile. And all in all it's entertainment that manages to be orders of magnitude less soul-destroying than what's on your television, so, all in all, whatever trends may be operating, I'm long ZH. Hell of a place. Just recently registreed but long time reader. Do I like all the directions I see it take? Maybe not, but it's filling a needed role in my life, and shows no signs of stopping that.

Henny Penny; don't worry then. Go see some other places where promise, dreams and cheap money rule. You can have all the bullshit you like. They will spoon feed you and even give you an IV when they are ready for you to die. At least you will know it wasn't a surprise to some.

You talk of a "huge freaking rally", but what was the NASDAQ valued at in 1999? What is it today? What happens if you poke the 1999 number into an inflation calculator? What would the NASDAQ have to be at today just to have kept EVEN with inflation?

Extra credit: What percentage of your money would you have lost investing in the NASDAQ index fund from 1999 to today?

do you not know how to trade? you buy and you sell. maybe you got it confused and bought and held and held and held. if you did i'm sorry and can understand your bitterness. hint: take some profits once ina while! what the nasdaq was in 1999 is irrelevant! you should know that. so why try to make it relevant? what is important is what will happen in the next weeks and months.

otherwise, read a book about the human will to survive, to perservere to thrive despite the obstacles. never been down 2 touchdowns in the 4th qtr only to come back and win? it's thrilling. but if you prefer the bunker and the mold and the bad light, more power to you.

i dislike our government very much and what they are doing to markets is despicable. but the markets are going up! they are going up because the fed is printing money like a madman. you guys have the answer right here, you're just trying to make the markets bend to your will. it never works that way. make some money to buy gold with for crying out loud.

will the rally go on for ever? not on your life but you have to participate when it does even though the technicals are horrible and there's no volume and etc and etc! it's going up and tyler seems to be on a mission to crash it for 6 months now. the reason why i posted is because i like his take on almost everything BUT it's becoming very apparent that Tyler is becoming bitter too.

Did the Greeks do the right thing? No. What can you do about it? Nothing! Is the EU doing the right thing? No! What can you do about it? Nothing? Are these things bullish for 2015? No. Are they bullish for 2012? Obviously! You rarely win when you fight the fed.

'TD' has been grinding the same old axe for years now, but if you read between the lines there is plenty of actionable stuff here. Focus on the data 'he' points out, not the necessarily the conclusions that are drawn. In fact, you might want to go ahead and assume in all cases he is on the other side of the trade as stated at the bottom right disclosure area. The site requires actual thinking to be of any use. The noise in the bar is mostly good for entertainment value.

Having said that I think it is safe to assume TD is really way long PM's. Any post about silver is manna from heaven, lol.

yeah - but nasdaq - the average american was taken from their pensions at jobs and given '401k' and the opportunity to make their own investment decisions. and they got lied to and robbed. they were told 'hold long term'. they don't have the time or wherewithal to day trade. and if they did - the fees eat them good too. and they sold 'index funds'. etc. so in terms of having a magnamimious, benevolent society - we continue dog eat dog, where wall street devours everyone that's not an insider. it's disgusting.

Do you mean trading like the dozens of successful risk compression trades, gs fx fades, and credit arb trades that have been posted here in real time? Or do you mean invest like the long gold trade they have been on since 700?

Anyone looking for a fish here is not doing it right, but getting a fish anyways.

Nasdaq99-
Do you understand what the motto of this website means?
I crossed this bridge on 911. I am staring at the TV on a trading floor watching the second plane live. Being an informed person, I know it is OBL. I also know a couple of people working at Cantor Fitz., that I will never talk to again.
My next thought is that if I buy all the five year notes my risk limit allows, I would be guaranteed a huge bonus. Yet, I am so glad I had the foresight to pause and think about what that money would mean to me.
Many times since I have wondered if I should have made the trade. Each time I conclude that the profit would have made me someone I did not want to be.
Who are you?

sorry, but you are confusing trading with politics. and i hope i would have reacted the same as you did on 9-11 but shake it off, don't let it define YOU. you did an honorable thing and it cost you money. good for you and maybe you payed it forward in some way that will bring you some real rewards in the future. who am i? i trade emerging growth. the future, the companies and the technologies that are defining tomorrow. and it's a bright world out there despite the mechanical breakdown indeveloped economies & central banks. life will go on. you see the $13 soybeans? it's putting coin in teh pockets of millions of people worldwide. a large population is getting a taset of what we had before we screwed it up and you can't hurt them. they make $1.50 /hour! have no mortgage and no car payment!

look, i have compassion, anger, fear for my kid, worries about my own retirement and a sadness that it is turning out this way. and i read this site every hour or so during the day.

HOWEVER, the market is going up and if i trade the upside and make some money, does that make me some kind of islamist???? wow, you guys have been in the bunker tooooo long. come out, it's springtime, i just shot an 82 and the bullets are not flying out there!

and as i told the previous guy, i like this site, it's take on the markets and i want tyler to maintain his cred but he is headed for a reputation as Chicken Little unles he gets a little more real.

Some of us believe it is an unsustainable system. Wall Street is broken, and you are helping perpetuate a crony capitalist machine that will betray you. The payoff from exposing injustice is a much more fulfilling currency.
You are mistakenly perceiving that all information is for trading leverage. Some have chosen to concentrate on making the world a better place.
I used to think you could do both at once. But the bankster system needs to be starved.

i hope you succeed and more power to you. we agree in principle but i can trade for a living and not be a part of the GS/JPM/BAC nightmare on wall street. i have actually thought about getting my soapbox and go to thelocal OWS gathering and trying to explain to them exactly what it is that they are mad about before the unions hijack the movement. but i would get "junked" there just like here. it's too complicated to explain in a soundbite. thinking about the delivery speech gives me chills, i would come off like a professor that would put them to sleep. even trained economists can't get it right!!!!! this country will not right the course before i retire, but i will trade it until the very end of my career. GLTA

Even trained economists? You make it sound like they are intelligent, respectable members of contributing society. Every "trained economist" I've ever met was a self-important ass, a dingbat who confused his macroeconomic specialty with every problem he encountered, or a little of both.

I would have said "...especially trained economists can't get it right." If you think they have sage wisdom, as opposed to TD here, you may want to have your head examined. No one trades solely on the basis of what is delivered here - it is a clearinghouse, not a paid-for and researched newsletter.

Wow. Truth is always true -- but not always expressed so eloquently. The choices we make are far more substantive than money earned from any unworthy effort. These are lessons to pass on to the ages. Thank you for your humanity.

Wow. Truth is always true -- but not always expressed so eloquently. The choices we make are far more substantive than money earned from any unworthy effort. These are lessons to pass on to the ages. Thank you for your humanity.

Nasdaq99-
I was not asking "who are you" because I wanted to know. I was hoping you would ask yourself.
I did notice you defined yourself by what you trade. Is that all there is in there.
As far as Tyler' s cred goes, there is more cred in truth than in only being as good as your last trade.

and you find cred in nit-picking words such as "you define yourself by what you trade". if you're looking for truth you need to come out of this bunker. i told you i am on your side but i try to use this site and the information here for clues to why something is happening and actionable. and my only point is that tyler has become so predictable in his rhetoric that he is sidelining himself and only looking at one side of what's happening is a shame. you choose to be here as some form ot political protest. what truth do you find in a POLITICAL protest in going into the bunker on an anonymous chat board and repeating the same stuff over and over to the buds? go over to HuffPo or CNN.com and take a whack at them! back up and look and you will find that all you're doing is huddling with your similar minded buddies from a world that has done you wrong. GLTU

i don't believe he ever told anyone to make a certain trade. he puts out information that the lamestream media refuses to publish. besides, how much have stock investors missed out by not investing in gold and silver the since march 2009? you suckers missed a 100% move

Fuck trade calls at the end of the day I want real information, real news, not corporate or government propaganda, I get some of it here a lot actually. As a bonus when I'm freaking out inside at how insane what is going on is, how unstable it all is, I get to laugh my ass of at some of the wittiest reader posts I've ever read or alternatively get informed by the same posters.

Buying gold has been the dominant investment conclusion on ZH since inception. You missed that move Sparky. And when the final accounting between your paper assets and the only true money is made you will be about broke in real dollar tems while I'll be just fine. Way to entirely miss the pont of a website...

the protagonist Tyler Durden says to his nameless friend, who despises his profession in the auto industry: We work at jobs we hate so we can buy shit we don't need.

Sedlácek:That is the expulsion from Paradise, transferred to the modern age.

In a SPIEGEL interview, Czech economist Tomas Sedlacek discusses morality in the current crisis and why he believes an economic policy that only pursues growth will always lead to debt. Those who don't know how to handle it, he argues, end up in a medieval debtor's prison, as the Greeks are experiencing today.

In the introduction to Sedlácek's book "Economics of Good and Evil," Havel wrote that most politicians "consciously or unconsciously accept and spread the Marxist thesis of the economic base and the spiritual superstructure." Sedlácek, however, turns this hierarchy on its head on his philosophical journey through cultural and economic history. For him, all of economics ultimately revolves around the question of how we ought to live. The Yale Economic Review described him as one of the promising "five hot minds in economics."

03/23/2012 SPIEGEL Interview with Tomas Sedlacek:'Greed is the Beginning of Everything'